2012 Farm Bill FAQ

Source: National Sustainable Agriculture Coalition

Fri, 2012-09-28 13:57

The National Sustainable Agriculture Coalition (NSAC) has been fielding lots of questions in the past few weeks following the congressional meltdown on the new farm bill. This is not surprising, given Congress’ failure to date to either pass a new farm bill or to enact a short-term extension of the existing farm bill before the farm bill expires at midnight, this Sunday, Sept. 30. From when and why the current bill expires to what happens if we revert back to the 1949 bill, NSAC has offered up answers.

When and why does the 2008 Farm Bill expire?

Congress generally reauthorizes farm bills – which help establish our food and agriculture policy as a nation – for a period of about five years, sometimes a little more or a little less. When Congress adopted the 2008 Farm Bill (officially the Food, Conservation, and Energy Act of 2008), they made the law sunset at the end of Fiscal Year 2012 – midnight on Sept. 30. When you wake up on Monday morning (Oct. 1), the current farm bill will have expired, without a new farm bill to take its place or a short-term extension to provide comprehensive ongoing legal authority.

Before the 2008 Farm Bill, Congress had never scheduled a farm bill to expire in a presidential election year. Some advocates, including NSAC, strongly advised against breaking that precedent while Congress considered the 2008 bill. But alas, the unwritten rule was violated, and the chickens have now come home to roost.

NSAC opposed that measure for several reasons, including the fact it was a long-term rather than short-term extension, and also because it failed to extend current farm bill programs that would have needed a renewal of funding to continue in 2013. In other words, it was a selective extension that left out critical programs.

In September, most of the forces and policy makers who want to get a new farm bill done this year felt that any extension might quite possibly undermine the push to finish the new bill. Meanwhile, forces and members of Congress opposed to the bill did not see a tactical advantage to extending current law. Combined, that situation meant an extension would likely have been impossible to pass anyway, though some floated the idea.

Hence, starting Monday, we wind up in limbo land instead. It is not exactly the first time this has happened, but it’s close. It had never happened before 2007. In 2007, as the fiscal year came to a close, Congress extended some but not all farm bill authorities in a Continuing Resolution that otherwise dealt primarily with appropriation matters. Congress then came back and passed the first of several short-term extensions of the entire 2002 Farm Bill at the end of December, a process which continued until the new bill became law in June 2008.

This year, Congress also needed to resort to a Continuing Resolution rather than finishing normal appropriations bills. The Continuing Resolution for Fiscal Year 2013 approved last week included an extension for food stamps and several closely related smaller nutrition programs, but nothing else, which is a perfect segue to the next question.

What happens if we were to revert to the 1949 Farm Bill?

If a new farm bill is not enacted or the current farm bill is not extended for a period of time, the farm bill commodity programs revert to permanent law contained in the 1938 and 1949 farm bills. Each successive farm bill since that time has suspended permanent law for the period of time provided for the newly enacted farm bill. But the permanent law provision is scheduled to pop back up and become the law of the land again if Congress does not enact a new bill or extend current law.

This peculiar feature normally induces Congress to get its work done on each new farm bill in a timely fashion. Without a 2008 Farm Bill extension or a new farm bill, dairy policy reverts to permanent law on Jan. 1, and grain and other commodities do so once the new 2013 crop is ready for planting.

USDA’s job to get ready to implement the 1949 Act actually begins next week, though few expect the department to spend much time on the matter. Why? Because reverting to permanent law would re-introduce a radically different farm program, one with much higher support prices (through nonrecourse loans instead of payments) that would require much smaller crop production and much higher consumer prices. It would also leave out any mandatory coverage for soybeans and other oilseeds as well as peanuts and sugar. In other words, it is widely considered so extremely anachronistic as to be unworkable.

Still, as impossible as it is to imagine it going into effect, permanent law will be the law of the land unless Congress acts to agree on a new farm bill, extend the current farm bill, or suspend or repeal permanent law.

How does the disaster assistance bill factor into this discussion?

Both the Senate- and House Committee-passed versions of the 2012 Farm Bill include comprehensive disaster assistance provisions. Passage of the new farm bill in the lame duck session of Congress in November and December would eliminate any need to consider separate disaster assistance legislation.

If Congress fails to enact a new bill, then disaster assistance to respond to drought, freezes, and other disasters from the past growing cycle may get separate consideration. The House passed a disaster bill just prior to its August recess, but it was not a comprehensive bill and it paid for disaster aid through an incredibly short-sighted set of cuts to working lands conservation programs.

The best thing Congress can do to respond to disaster needs is to pass a new farm bill. If that does not happen and a separate bill is considered, Congress should pass it under the disaster aid provision provided for by the Budget Control Act of 2011 — not by raiding the very conservation programs that help farmers become more resilient and thus better able to deal with drought and other extreme weather conditions.

What are the farm bill choices that Congress has during the lame duck session?

There are two theories about what happens next. In one, the House returns after the elections and finally brings its bill to the floor, passes the bill with amendments, the House and Senate versions then get reconciled in a farm bill “conference” committee, and a melded final bill is approved by the conference, sent back to both bodies for a final vote, and sent to the President for his signature – all within the three to five weeks of the short “lame duck” session.

In the other theory, Congress returns after the election and works out the details of a bill to extend, with some modifications, the 2008 Farm Bill until a date in the spring, summer, or fall of 2013. Under this scenario, the new session of Congress that begins in January (and lasts for the next two years) will start the five-year farm bill process all over again, with both House and Senate Agriculture Committees formulating a new bill that will then go through the entire legislative process all over again.

One of the big factors that should concern food and agricultural interests with choice number two is the fact that a new farm bill finished in 2013 will operate under a different budget baseline than if the bill is finished in the lame duck session. It is too early to say for sure what the impact of the new baseline would be, but expenditures for crop insurance subsidies will most certainly be higher, increasing the total cost of the farm bill, and projected savings from changes to commodity programs in the pending 2012 bills will almost certainly be lower. Absent a reversal of the conservation cuts in the Continuing Resolution during the lame duck session, the conservation budget baseline will be lower, making that title more difficult to put together. All things considered, there is a very strong possibility that the new baseline alone will make the task for finishing a farm bill more difficult. And that does not even include factoring in the politics around any long-term budget deal that may or may not be reached next year.